At MCX, Gold August prices have near term resistance at Rs 49,500 per 10 grams and support at Rs 48,600 per 10 grams.
Tapan Patel
Commodity prices traded mixed last week with base metals prices witnessing some selling pressure from recent highs while bullion prices continued to trade firm. Crude oil prices hovered near $40 a barrel throughout the week in line with the expectations on mixed market cues. The fall in dollar index supported bullion and copper prices to end in green during the week as dollar fell by nearly 0.70 percent against the global peers.
Gold prices traded firm as COMEX spot gold ended at $1,810 per ounce after witnessing some correction at the start of the week on vaccine hopes. Gold prices rallied on heightened risk sentiments over US-China tensions and record surge in COVID-19 cases. The recent comments from US President Donald Trump signalling no phase-two trade deal with China in the near term pushed prices higher. The Gold ETF holdings continue to hit highs as holdings at SPDR Gold Shares rose to 1,206.89 tonnes on Friday. COMEX spot Silver prices outperformed gold rallying more than 3 percent as investors found silver cheaper than gold among the precious metals. The gold/silver ratio has declined to below 94 after hitting a record above 120. We expect gold prices to trade higher with near term resistance at $1,830 per ounce and support at $1,790 per ounce. At MCX, Gold August prices have near term resistance at Rs 49,500 per 10 grams and support at Rs 48,600 per 10 grams.
Crude oil prices ended marginally down with benchmark NYMEX WTI crude oil prices trading rangebound near $40 per barrel throughout the week. Crude oil prices rose to $41 a barrel in the first half of the week on bullish weekly inventory data. Crude oil prices later traded under pressure on weak demand concerns amid rising virus cases in the US and other parts of the world. The sharp fall in Chinese equities also dragged oil prices towards $40 a barrel. The OPEC plus nations have agreed to ease the output cut quotas to 7.7 million barrels per day as per market expectations. The total crude oil rigs continued to decline with active oil rigs fell by 1 to 180 as per data published by Baker Hughes. The CFTC data showed that NYMEX WTI crude oil net long positions fell by 2,044 lots last week. We expect oil prices to continue to trade in the current range of $37 to $43 per barrel during the current week. MCX Crude oil August future contract has important resistance at Rs 3,160 per barrel and support at Rs 2,920 for the coming week.
Base metals complex traded mixed with most of the metals witnessed selling from recent highs. Copper remained exception amongst the metals on supply concerns. Base metals pared gains on demand growth concerns amid a fresh spat between the US and China over the South China Sea and Hong Kong National Security Law. Copper prices managed to end in green on lower supply concerns from top mining nations Peru and Chile. Copper inventories at SHFE rose by 16 percent to 1,58,647 tonnes last week. LME Copper prices have touched strong resistance near $6,645 per tonne at 76.4 percent retracement levels of previous fall. We expect Copper prices to witness some correction with support at $6,240 per tonne. MCX Copper July futures have near term resistance at Rs 510 per kg with support at Rs 490 per kg for the short term.
The author is Senior Analyst - Commodities at HDFC Securities.
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